Permira to Refinance Iglo

The private equity group Permira will cancel plans for a sale and will instead go ahead with a recapitalisation of the frozen foods business Birds Eye Iglo.

Blackstone and BC Partners have long been attempting to use Iglo as part of a larger purchase in an attempt to create synergies with other frozen foods businesses.

However, Permira’s valuation of the business ranged from between €300 million and €500 million above what buyers were said to be willing to pay.

The recapitalisation will see investors receive the majority of capital back, and will increase Birds Eye’s debt by nearly €2 billion. Permira will look to plough the rest of the funds back into the company in a bid to increase its revenues, which were a mammoth €1.1 billion last year.

Indeed, Permira are also rumoured to be on the lookout for other firms in the sector. Findus Group, owned by the private equity firm Lion Capital, for one, may be a target as the firm looks to break up the business to meet its debt obligations.

Permira are one of the financial world’s busier participants at the moment. They are also in talks with the Qatari royal family over the sale of the luxury Italian fashion brand Valentino.

The group, aside from its famous eponymous brand label, also has stakes in Hugo Boss and Missoni.

However, as this article forcefully argues, private equity in general is undergoing a lull.

A study undertaken by the Centre for Mangement Buyout Research (CMBOR) shows that the Eurozone debt crisis is propagating such uncertainty in the markets that Q2’s figures in terms of net European buyout values dropped by more than a third compared to Q1, and making it 60% lower than the same period last year.

3i’s new CEO Simon Borrows, in his speech outlining the group’s new strategy last month, said that while good assets are still sought after in the private equity world, any assets with a sceptical debt position are being actively avoided.

Uncertainty is being worsened not just by the perilous sovereign debt profiles of European states, but by policy-makers’ increasingly outlandish and unpredictable responses.